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UK House of Lords’ report on dispute resolution and enforcement post Brexit

The UK House of Lords has released its report on dispute resolution and enforcement post Brexit (EU Committee, 15th Report of Session 2017–19). Here is the official summary, which will not be always pleasing to read for some members of the current UK Government, especially in relation to European Civil Justice:

“When the United Kingdom leaves the European Union, the Government has said that it will end the direct jurisdiction in the UK of the Court of Justice of the European Union (CJEU). On the assumption that this happens, it is essential for the rule of law in the UK that an adequate replacement is found, both to help resolve any disputes between the UK and EU post-Brexit, and to ensure that there is a robust system that will allow individuals and businesses to enforce their rights.

The necessary provisions for enforcement and dispute resolution after Brexit relate to three distinct matters: the enforcement of the Withdrawal Agreement concluded under Article 50 of the Treaty on European Union; arrangements during the proposed transition period; and, the dispute resolution system that is implemented under any separate agreement that is reached on the future relationship between the EU and the UK. There is also the related question of how to deal with justice cooperation issues in civil, family and criminal law.

Outside the CJEU, no ‘one size fits all’ dispute resolution model could deal with these issues. The Government will have to agree multiple dispute resolution procedures post-Brexit. While it was suggested that the EFTA Court, which has jurisdiction over the EFTA States (Iceland, Liechtenstein and Norway), might take jurisdiction over all these matters, this proposed solution is not without technical problems—though the Government should not discount using the EFTA Court as a means of adjudicating disputes over the Withdrawal Agreement, if this can be agreed with the EU 27 and the EFTA States.

Liabilities and obligations under the Withdrawal Agreement may arise for many years after the UK has left the EU. It would be problematic to leave the interpretation of the entirety of this agreement to the CJEU, since it is associated with one of the parties to the agreement, and any perception of bias should be avoided. However, the Government will need to be mindful of the fact that the legal autonomy of the EU, as defined by the CJEU, means that only the CJEU can have the final say on the interpretation of EU law. This means that innovative solutions may prove problematic, particularly since the Withdrawal Agreement may be referred to the CJEU to determine whether it is legally compatible with the EU Treaties.

The Government’s proposed solution appears to be that any disputes relating to the Withdrawal Agreement would be settled in the political sphere by the proposed UK-EU Joint Committee that will be established under the agreement. But this could leave intractable disputes between the UK and the EU unsettled. A pragmatic solution will need to be found and time is short.

During the transition, the UK will continue to be bound by the jurisdiction of the CJEU and, since this period should be relatively short, it may be too burdensome to seek to establish a separate dispute resolution mechanism. Nonetheless, this continued jurisdiction of the CJEU should be for a reasonable, time-limited, period; and, it is important for legal certainty that there is a longstop period for any claims that arise during the transition.

In relation to the future relationship, it is not possible to recommend a precise model since much will depend on the closeness of the partnership between the UK and the EU. The Prime Minister has already recognised that, if the UK wishes to pursue a deep and special partnership which involves participating in EU agencies, it will have to respect the remit of the CJEU in those areas. This is also an issue with EU law based mechanisms such as the European Arrest Warrant (EAW). Whatever formal structure is adopted, it is likely to be composite in nature and there may be different levels of integration in different spheres. This may allow the UK to restrict CJEU jurisdiction to specified and limited areas, such as those involving direct co-operation with EU agencies, or within the field of justice and home affairs. Rejecting the remit of the CJEU entirely would mean the UK losing access to EU agencies upon which it relies, including those responsible for the regulation of aviation, medicines and chemicals, as well as the EAW.

More broadly, it is important that any enforcement and dispute resolution established under the future relationship should be accessible to citizens and business and should be transparent. It would be prejudicial to the interests of citizens and businesses if the future dispute resolution system were conducted entirely at a state-to-state level.

We have previously reported on issues relating to the mutual recognition of civil, family and commercial judgments. The Government’s response to our report highlighted limited progress. We continue to have grave concerns about these issues and will revisit them in our future work.

UK lawyers and judges have played an important role in the evolution of EU law, but after Brexit the ability of the UK to affect the development of case-law in the EU is likely to diminish significantly. Given the importance of the jurisdiction of the CJEU internationally, this may have a negative impact on the international standing of the UK’s common law system. We also note that the ability to request a preliminary reference from the CJEU, combined with the direct effect and supremacy of EU law, has sometimes acted as a check on Government action. This check will be lost as a result of Brexit, and so the rights of individuals will be weakened”.